29 December,2025 07:28 PM IST | Mumbai | mid-day online correspondent
The central bank said it continues to promote secure and interoperable digital payments. Representational pic
India's commercial banking sector remained resilient during 2024-25 and so far in 2025-26, supported by double-digit balance sheet expansion and a steady improvement in asset quality, with the gross non-performing assets (GNPA) ratio declining to a multi-decadal low of 2.1 per cent at the end of September 2025, news agency IANS reported, citing a Reserve Bank of India (RBI) report released on Monday.
The RBI, in its report titled Trend and Progress of Banking in India, said deposits and credit of scheduled commercial banks (SCBs) continued to grow in double digits, although the pace moderated compared to the previous year.
Asset quality strengthened further during the period, with the GNPA ratio declining from 2.2 per cent by the end of March to 2.1 per cent at September-end, reflecting improved recovery and better credit discipline across the banking system, IANS reported.
The profitability of SCBs remained robust in 2024-25, with the return on assets (RoA) at 1.4 per cent and return on equity (RoE) at 13.5 per cent. During the first half of 2025-26, the RoA and RoE stood at 1.3 per cent and 12.5 per cent, respectively, the report said.
Capital adequacy levels also remained strong. The capital-to-risk-weighted assets ratio of SCBs was 17.4 per cent at March-end and 17.2 per cent at September-end, indicating adequate buffers to absorb potential shocks, IANS reported.
The RBI report noted that the consolidated balance sheet of urban co-operative banks recorded higher growth in 2024-25 compared to the previous year. Asset quality of urban co-operative banks improved for the fourth consecutive year, alongside strengthening of their capital buffers and profitability.
Non-banking financial companies (NBFCs) continued to record double-digit credit growth during the year, supported by robust capital buffers. Their asset quality also showed improvement, the report said.
According to the RBI's assessment, banks and NBFCs remain resilient, backed by strong capital positions, improved asset quality and robust earnings. This has enabled continued credit flow to productive sectors of the economy as well as to underserved segments.
The central bank said it continues to promote secure and interoperable digital payments within the country and their integration with global payment systems. It is also enabling responsible adoption of technology and the use of alternative data to expand financial inclusion.
The RBI added that its regulatory and supervisory policies remain focused on reinforcing cybersecurity, mitigating fraud, enhancing customer protection, integrating climate risk awareness and preserving financial stability as an overarching goal.
Going forward, regulations and macroprudential policies are being aligned to further strengthen the resilience and competitiveness of the banking sector while promoting ease of doing business. Balancing financial innovation with stability, strengthening public trust and supporting sustainable development will continue to guide the Reserve Bank's policy approach, the report said.
(With IANS inputs)
